Intermodal and Supply Chain Management

Running head: SUPPLY CHAIN MANAGEMENT
Intermodal and Supply Chain Management
Name of the Student
Name of the University
Author note

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Table of Contents
Introduction:....................................................................................................................................3
About the company-Qube Holdings Limited:.................................................................................4
Background and leadership..........................................................................................................4
Financial performances:...............................................................................................................4
Markets, products and competitors:.............................................................................................6
Important features of an intermodal network:.................................................................................6
Proximity to transport and storage network:...............................................................................7
Financial strength:.......................................................................................................................8
Availability of advanced technology:..........................................................................................9
Availability of adequate land:......................................................................................................9
Availability of ancillary units:...................................................................................................10
Main problems in current logistics in NSW:.................................................................................10
Geographical issues:..................................................................................................................10
Regional challenges:..................................................................................................................11
Resolving the problem:..................................................................................................................12
Logistics Simulation Software:..................................................................................................12
Restructuring of intermodal methods of transport:....................................................................12
Involvement of the NSW Government:.........................................................................................13
Recommendations:........................................................................................................................13

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Measuring carbon footprint:......................................................................................................13
Supply chain redesigning:..........................................................................................................14
Conclusion:....................................................................................................................................15
References:....................................................................................................................................16

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Introduction:
The intermodal mode of goods transport plays a very significant role in making inventory
of raw materials, work-in-progress and finished goods available in the market. Qu, Bektaş and
Bennell (2016) define the term intermodal transport is the method of transporting goods freight
from place to another without physically handling the goods being transported. The term
intermodal transport can also be defined according the lines of Bilgen (2016) as the
transportation of goods using multiple modes of transport which includes ships and trucks. An
analysis of the two definition brings into light two aspects of the term. The first aspect is that the
goods being transported are not handled physically and the second aspect is that multiple modes
of transport are involved in intermodal network. Intermodal transport increases the security and
reduces scopes of spillage or loss of goods owing to the fact that the goods being packed are not
dismantled, only the container holding the goods are unloaded and loaded (Xu, Cheng and
Huang 2015). Secondly, the intermodal network enables transportation of bulk goods across long
distances, thus reducing per unit transportation costs. Thirdly, the intermodal transport relieves
the companies of high insurance costs since the containers are only handled. Fourthly,
intermodal transport enables bulk goods, thus enabling companies to reduce their carbon
footprints while transportation of goods. These advantages of intermodal network have made
them very significant to national economies and organisations at the micro-economic levels are
considering intermodal transportation with due importance and embracing a service-centric
business model rather than considering their manufacturing activities are pivotal activities. It can
be stated that companies are considering offering services to customers as important as selling
goods. This growing importance of services in the manufacturing sector has led to coining of the
term ‘service science’ and manufacturing companies are also providing services to customers

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like after sales services and 24*7 customer care services (Stoshikj, Kryvinska and Strauss 2016).
It can be pointed out that intermodal logistics industry though booming, faces several issues
namely, changing legislations, cost pressure and environmental impact pressures. The aim of
the paper would be visit these different aspects of intermodal transport with emphasis of the state
of NSW, Australia. The company chosen for the research is Qube Holdings Limited which leads
Australian intermodal market and is based in Sydney, New South Wales (Qube.com.au. 2019).
About the company-Qube Holdings Limited:
Background and leadership:
Qube Holdings Limited is the leading intermodal company of Australia having its
headquarters in Sydney, New South Wales, Australia. The company operates under the
leadership of Mr. Allen Davies in the capacity of chairperson.
Financial performances:
Qube is listed on ASX and generates immense capital by issuing shares in the capital
market. The second figure shows the performance of the company in the Australian stock market
for the past 5 years. It shows that Qube enjoys high share price trend on ASX but has
experienced bearish trends to as low as negative returns on four occasions. The company reached
its highest performance on the stock market in 2015. The analysis shows that the company on the
whole enjoys a favourable position in the stock market.
As far as the revenue generation of Qube Holdings Limited is concerned, the company
generated a profit before tax of $ 286.8 million in FY 2018 compared to $ 104.7 million in FY
2017 (figure 1). This shows that the revenue generation of Qube has increased by more than 100
percent in 2018 compared to 2017. It can also be pointed out that from the analysis of income

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statement that higher revenue has enabled the company to give high returns to the shareholders.
Thus, it can be inferred that the strong capital generation and revenue generation attribute Qube
the strong financial base to operate as the leading intermodal company in Australia.
Figure 1. Except of financial statements showing net profit of Qube Holdings Limited for the FY
2018 and 2017
(Source: Qube.com.au. 2019)

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Figure 2. Graph showing share indices of Qube Holdings Limited for 5 years on ASX
(Source: Asx.com.au. 2019)
Markets, products and competitors:
The main markets of Qube Holdings Limited are Australia, New Zealand, Malaysia and
Indonesia. The core operations of Qube is divided into four main divisions namely, Ports, Bulks.
Logistics and Infrastructure as well as property development. Qube provides a wide range of
intermodal services like mine site services, storage facilities, rail transportation, port operations
and vessel operations. The company also provides project consultancy services as well as
terminal operation services. The main clients of Qube Holdings are the multinational companies
from diverse industries like mining and manufacturing. The main competitors of Qube Holdings
Limited are J.B. Hunt Intermodal and XPO Logistics, both based in the United States.
Important features of an intermodal network:
The following are the main features which intermodal networks which enable to play
pivotal role in movement of goods within the global market:

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Proximity to transport and storage network:
The intermodal terminals should be situated close to important transport terminals which
enables to handle bulk freights with superior accuracy and efficiency. Grace et al. (2016)
mention that intermodal terminals should be located in close to transport networks like railways
stations and important roads. This would allow the firms transporting the goods to despatch
containers faster which would reduce the damage to the products. Shaheen, Totte and Stocker
(2018) strengthen the argument by mentioning that proximity to warehouse locations enables the
intermodal companies to warehouse the containers with minimum delay, thus reducing
possibilities of on-transit damage. As far as Qube is concerned, it can be pointed out that the
Australian intermodal company has offices along the coasts of Australia. The company has
presence in New Zealand, Malaysia and Indonesia. This enables the company to receive and ship
containers from its clients. The company owns its chain of warehouses which enable it to store
goods with minimum time lapse from receipt from clients. Thus, it can be inferred from the
discussion that Qube satisfies the first characteristic pointed out above.

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Figure 3. Map showing locations of Qube Holdings Limited
(Source: Qube.com.au. 2019)
Financial strength:
A robust financial structure is one of the most important characteristics which support the
operations of the intermodal companies. Hong et al.(2017) point out that intermodal companies
require to use advanced technology to handle, track and manage customers. Ha et al.(2017)
strengthens the opinion of the previous authors by pointing out that efficient intermodal
operations require the intermodal companies to employ highly skilled employees and advanced
machinery. This means that they require immense financial base to support this robust scale of
operations. It can be pointed out that Qube Holdings qualifies this attribute which is evident from
the capital and revenue generation. The company operates in four countries which requires it to
mobilise immense amount of capital. It is evident from the share indices of the company that it is
able to generate immense capital from the Australian market to support its multinational
operations (Figure 2). The financial statements of the company shows that it has succeeded in

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doubling its revenue generation in 2018 compared to the previous year, 2017 (figure 1). Thus, it
can be inferred that the strong financial base of Qube Holdings Limited enables to operate its
intermodal business efficiently.
Availability of advanced technology:
The intermodal networks are featured with advanced technology which enables them to
handle bulk containers with efficiency. Lorenc and Kuźnar (2017) point out that intermodal
networks are required to handle bulk freight with high quality of accuracy and efficiency to
ensure satisfaction of clients, the companies they serve. Moreover, the intermodal companies
require advanced technology to store freight in warehouses securely (Čamaj, Mašek and Kendra
2016). They logistics companies require to apply advanced MS applications like optimisation,
simulation, decision making and forecasting and inventory models to handle containers
efficiently. As far Qube is concerned, the company holds warehouses with advanced container
handling facilities. Secondly, the intermodal company provides specialised logistics facilities for
different category of products like food products, polymers and civil construction inventory
(Qube.com.au. 2019). This proves that Qube Holdings Limited is technologically very strong
which strengthens its intermodal operations.
Availability of adequate land:
Intermodal networks are characterised by availability of sufficient land around their
office locations to enable handling of large volume of in-transit containers. This allows the client
companies of the intermodal network to establish their respective container loading units close to
the network hub (Shepelev et al. 2018). For example, the New South Wales operations of Qube
Holdings is located in Sydney as shown in the map (Figure 3). This enables the clients of the
company to set up the goods loading units around the operational units of Qube. This availability

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of adequate land around or close to the locations of the company enables it to serve several
clients which in turn allow it to generate huge revenue (Figure 1).
Availability of ancillary units:
A very important attribute of the intermodal network is availability of ancillary units.
Wiseman (2018) opines that availability of ancillary units like financing companies and units
manufacturing machinery parts enable the main intermodal companies to acquire the financial
resources and ancillary parts for their plants at economic rates. Stopka and Kampf (2016)
strengthens the argument by opining that this availability of funds and spare parts at economic
rates enables the intermodal transport companies to reduce their cost of operations and which
boosts their profit margin. As far as Qube is concerned, the company has operational units in
places like Brisbane which are industrial hubs. These locations have immense number of
ancillary units manufacturing firms which provide spare parts at economic rates. This enables the
firm to keep its plant maintenance costs low and boosts its profit margin. This is evident from the
net profit which the firm generated in the previous two years as shown on the first table (figure
1).
Main problems in current logistics in NSW:
The intermodal transportation industry in New South are faced with several problems.
The following are the main problems which the intermodal companies face while operating in
NSW:
Geographical issues:
The first problem which intermodal companies face in operating in New South Wales is
traffic congestions, toll roads and heterogeneous road conditions. The roads through the cities

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like Sydney are so congested that intermodal transport is hindered. Shin, Roh and Hur (2018)
mentions that congested roads result in slow moving of the freight which result in increase in
possibilities of degradation of the perishable goods. Surugiu, Barna and Obreja (2015) support
the opinion by pointing out that uneven roads are bigger threats to intermodal transport. This
increases chances of accidents and delays delivery of goods. As far as Qube is concerned, that
the company already faced expenses due to impairment of assets which include logistics vehicles
(Qube.com.au. 2019) (figure 1). Thus, it can be asserted that traffic congestion and uneven roads
do result in losses to the intermodal companies like Qube.
Regional challenges:
The regional challenges which intermodal freight encounters in NSW are due to distance
between two places and animals. Yu, Zhang and Zhang (2017) point out that distances between
location of origin and location of destinations are great issues. This is evident from the fact that
long distance between the place where their container is loaded and the destination market
increases chances of spoilage of the goods. Mostert, Caris and Limbourg (2017) point out that
distance between two places result in more combustion of fuel which in turn leads to higher fuel
charges for the company. It can be pointed out in the light of these two articles that distance two
towns result in using of more fuel to transport the goods. Moreover, animals like kangaroos get
into the ways of the trucks, thus slowing their speed. Kangaroos have also been knowledge to
damage logistics machinery and injure workers (Abc.net.au. 2019). This in turn aggravates
environmental pollution and expenditure which the Qube spends to acquire fuel for its
intermodal fleets. Thus, it can be inferred that regional challenges are serious issues which the
intermodal networks are facing in NSW.

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Resolving the problem:
The following are the methods which the intermodal companies like Qube can apply to
deal with the above mentioned issues:
Logistics Simulation Software:
The first strategy which intermodal companies like Qube adopt in order to deal with the
issues mentioned above is installing of logistics simulation software. Niemueller et al.(2016)
point out that logistics simulation software enables the intermodal companies to track their
freight in transit. Logistics simulation software follow the flowchart methodology and enable the
companies to obtain results in both 2D and 3D format. This enables them to manage their entire
logistics operations more systematically and enable them to communicate issues like bad roads
to drivers in advance. This helps the drivers to choose logistics transportation routes more
judiciously and avoid or at least minimise damage to the products. Thus, logistics simulation
software enables the companies to reduce losses they incur due to damage of vehicles due to road
conditions and spoilage of freight.
Restructuring of intermodal methods of transport:
The intermodal companies can restructure their intermodal transport methods to minimise
the losses they face to the geographical and distance issues. For example, in order to transport
freight across highly congested areas of New South Wales, the intermodal companies can
restructure their transport methods and opt for ferries and barges. While transporting goods over
large areas, the logistics companies like Qube can use air transport, thus reducing time required
to transport freight (Mangan, Lalwani and Lalwani 2016). Thus, it can be inferred that the

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companies like Qube can reduce time of freight transit and fuel expenses by restructuring their
methods of transport.
Involvement of the NSW Government:
The NSW Government have to play a very important role in boosting the intermodal
freight network within the state. The government of NSW can build new roads and repair the
existing ones to enable faster movement of freights (Rms.nsw.gov.au. 2019). Similarly, the
government can also build logistics bridges to enable intermodal companies like Qube transport
goods faster.
Recommendations:
The following are the recommendations which can be made to the management of the
Qube to enhance the company’s logistics services and attain sustainability:
Measuring carbon footprint:
The management of Qube should adopt the system of measuring the amount of carbon
footprint created on individual journeys. The intermodal companies should compare the amount
of emission which each transport mode would consume which would in turn result in increased
fuel expenditure (Figure 4). They should plan their intermodal freight transport strategy so as to
incur minimum fuel expenses by opting for the least carbon emitting transport option.

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Figure 4. End-to-end CO2 emissions for different routes of bulk products Graph
(Rigot-Muller et al. 2013)
Supply chain redesigning:
The intermodal companies like Qube should redesign their supply chain and decide
location of warehouses and distribution network. It can also be recommended that they should
build new warehouses in areas where they have no warehouses. This would enable them to
reduce chances of long distance travel of freight and reduce possibilities of spoilage of perishable
items on transit.

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Conclusion:
It can thus be concluded from the discussion that intermodal networks have a great
impact on movement of goods both within countries and internationally. It has also been found
the intermodal network require several attributes like availability of very strong financial base
and advanced technology to be able to function efficiently. As far as Qube is concerned, the
company is very strong financially and has a huge market to diversify its business risks. The
company however faces issues like distance. The company should form strategies to deal with
these issues by restructuring of its supply chain. The Government of NSW should also build
roads to promote faster transport of freight.

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